Society SVB Bank insolvency/collapse - Silicone Valley
- Thread starter sparkuri
- Start date
If only there were a way for people to not spread the panic by sharing the clickbait...
Have you not met society?
I get it, I'm the problem right?
People like me, not say, Microsoft?
I generally encourage people to turn off the news, not spread it around. To each his own.
Are you telling me they didnt actually possess the 30 trillion customers see on paper/screen?
The top ten uh oh's:
First Republic Bank
Sandy Spring Bancorp, Inc.
New York Community Bancorp, Inc.
First Foundation, Inc.
Ally Financial, Inc.
Dime Community Bancshares, Inc.
Pacific Premier Bancorp, Inc.
Prosperity Bancshares, Inc.
Columbia Financial, Inc.
First Republic Bank
Sandy Spring Bancorp, Inc.
New York Community Bancorp, Inc.
First Foundation, Inc.
Ally Financial, Inc.
Dime Community Bancshares, Inc.
Pacific Premier Bancorp, Inc.
Prosperity Bancshares, Inc.
Columbia Financial, Inc.
How many banks does America have?
I can only imagine how that would've flown during the great vaccine push by the media.
Sorry, I did fuking put this in the wrong thread
First time I’ve ever made a mistake
Thanks for making fun of me, it makes me feel really good about myself
I would have pulled my money as well if they sent this to me, their priorities are all mucked up.
Emo Bank
Emo Bank
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IE "we're going to hire the weakest capitulating most compromised fearfully compliant social demographics on earth until we bleed gold before you eat bugs"
Not well. People love the news.
Its nice that those heads at SVB gave themselves nice fat bonuses before it all went to crap. Its almost like they knew what was coming. Whats that Steve Miller song, Take the Money and Run?
Hey Rambo
The 30 trillion number probably relates to a concept called notional value, which is not helpful in determining risk for a couple reasons
First off, it's just a number used as part of a calculation. It's not an IOU
Let's say you and I do a 1 trillion dollar vanilla interest rate swap (swaps this big don't exist. It's just an example)
In that swap, I pay you 1% every quarter (a fixed leg) and you pay me libor every quarter (a floating leg)
The amounts you or i owe each other are calculated based off the 1 trillion notional, but the 1 trillion never changed hands and never will. It's just a number that's used in the calculation of the pay and recieve legs of the swap
The second issue is that notional is not reflective of risk
As an example, if I do a 100 dollar swap with you, and the opposite 100 dollar swap with beard, then my market risk is actually 0. If interests rates go up, I win on one swap and lose on the other. But it nets to 0.
However, the article would say I have 200 dollars of swaps despite really having 0 dollars of risk
That brings us to the real issue. Counterparty risk... SVB is going to default on swaps
So it comes down to the risk vs specific counterparties. Let's say financial institutional named beard has done 1 trillion of swaps vs SVB...
Alot of the swaps offset each other. So the true risk for beard isn't 1 trillion. It's just the net value of all those swaps
The passage of Dodd frank was very bad in many ways. It made too big to fail banks even bigger
One of its positive side effects tho was mandatory compression. Banks now have teams that are constantly working with compression teams from other banks to get rid of trades that effectively net to 0
Here's a simplified example
I have 100mm swap to pay you 5% and recieve labor
You have 100mm swap with beard to pay 5% and recieve libor
beard has a 100mm swap with me to pay 5% and receive libor
The net market risk to all of us is 0. But we all face counterparty risk to each other while those swaps are outstanding
The compression teams analyze huge portfolios among a bunch of broker dealers and say "alright, Let's cancel all these since it nets to 0. Yall agree? Cool. Done."
Long story short, I'm not saying there won't be losers. There will be. But 30 trillion is a very misleading number since it doesn't reflect the actual risk that SVB had to the market or to individual counterparties
Edit: I never did compressions with SVB while at Morgan. Just Goldman, JPM, BOA, and some others. So dodd frank might have only applied to the big boys. I cant recall the details
That could explain why SVBs notional is increasing over time in sparkuris chart
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Hello Storm, hope your well and happy
Thank you for the breakdown
I don't trust these banks
